LOCAL 706, PLUMBERS & STEAMFITTERS UNION,

EL DORADO, ARK.

(On March 22, 1960, James F. Mundie and LaVern J. Duffy testified in executive session during hearings held by the Select Committee on Improper Activities in the Labor or Management Field. This testimony was made public on March 26, 1960, by members of the select committee and follows below.)

TUESDAY, MARCH 22, 1960

U.S. SENATE,

SELECT COMMITTEE ON IMPROPER ACTIVITIES
IN THE LABOR OR MANAGEMENT FIELD,

Washington, D.C.

The select committee met at 10:20 a.m., pursuant to Senate Resolution 249, agreed to February 8, 1960, in room 3302 of the Senate Office Building, Senate John L. McClellan (chairman of the select committee) presiding.

Present: Senator John L. McClellan, Democrat, Arkansas; Senator Karl E. Mundt, Republican, South Dakota (letter); Senator Sam J. Ervin, Jr., Democrat, North Carolina.

Also present: Jerome S. Adlerman, acting chief counsel; James F. Mundie, investigator; LaVern J. Duffy, investigator; Ruth Y. Watt, chief clerk.

The CHAIRMAN. The committee will please come to order.

Before we proceed with testimony, the Chair will make a brief statement for the record.

First, I may insert in the record at this point a letter from the Honorable Karl E. Mundt, vice chairman, consenting that these hearings may be held by the chairman with only one member of the committee present. At this point, however, I would note in the record that Senator Ervin is expected to attend the hearings and will arrive shortly.

(The letter is as follows:)

Hon. JOHN L. MCCLELLAN,

Chairman, Senate Select Committee on Improper Activities in the Labor or Management Field, Washington, D.C.

DEAR SENATOR MCCLELLAN: Pursuant to rule 3 of the rules of procedure adopted by the Senate Select Committee on Improper Activities in the Labor or Management Field, you have my permission, as vice chairman, to conduct executive hearings on matters relating to the Arkansas situation, without a quorum of two members, for the purpose of taking testimony in executive session on Tuesday, March 22, 1960.

Sincerely yours,

KARL E. MUNDT,
Vice Chairman.

The CHAIRMAN. We are proceeding, however, since the Senate meets at 12 o'clock, and it is desired if we can to conclude these executive proceedings before noon.

1

More than a year ago the Chair began receiving complaints from Local 706 of the Plumbers & Steamfitters Union of El Dorado, Ark., concerning the misuse of union funds and possible embezzlement of certain funds that were derived from assessments made against members of the union for the privilege of working. This was on a special project that was then under construction in Arkansas. There was a charge made, known as an assessment fee or assessment money, against each member who worked or each person who worked on the project as a steamfitter or plumber. These funds, it is alleged, have not been adequately accounted for. The complaints also charged that there had been a rigged election, also that there was lack of democracy in the union, and that a dictatorial rule generally prevailed. These complaints were considered, and it had been the purpose of the Chair to have a preliminary investigation conducted with a view possibly of a full-scale investigation later.

That preliminary investigation has been conducted. We have present this morning members of the staff who conducted it, and we desire to get from them testimony with respect to their investigation, what information they were able to obtain, and what they found the facts to be.

This record will be made and preserved under the rules governing executive hearings. If the jurisdiction of this Senate select committee is by the Senate transferred to another committee of the Senate, these records will no doubt be available, such other committee or this committee, if it is continued beyond the 31st of March, may desire to hold full-scale hearings on the basis of the results of the preliminary investigation made by the staff.

The staff made this preliminary investigation into the financial operations of local 706, particularly during the years 1951 through 1954, at a time when a large Government arsenal was constructed at Pine Bluff, Ark.

As I pointed out up above, it is alleged that large amounts of money collected from members working on this project were, I think, designated "assessment money.". It appears from information before the committee that a large portion of this assessment money has not been properly accounted for.

The first witness will be Mr. James F. Mundie.

Do you and each of you solemnly swear that the evidence given before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. MUNDIE. I do.

Mr. DUFFY. I do.

The CHAIRMAN. Mr. Mundie, you have been duly sworn. Will you state your name, your place of residence, and your present business, occupation, or employment?

TESTIMONY OF JAMES F. MUNDIE AND LAVERN J. DUFFY

Mr. MUNDIE. My name is James F. Mundie. I reside at 3903 Silver Hill Road, Washington, D.C., and I am an investigator for the staff. The CHAIRMAN. Are you one of the staff investigators of this committee?

Mr. MUNDIE. I am.

The CHAIRMAN. What is your present position?

Mr. MUNDIE. Special agent, U.S. Treasury Department, Internal Revenue Service.

The CHAIRMAN. How long have you served as a special agent for the Treasury Department?

Mr. MUNDIE. Since August of 1948.

The CHAIRMAN. Did you have previous service with the Government in any capacity?

Mr. MUNDIE. Yes, sir. Since 1921 I have been with the U.S. Treasury Department.

The CHAIRMAN. You have been with the Treasury Department since 1921?

Mr. MUNDIE. Since September of 1921.

The CHAIRMAN. During the life of this committee, have you served on its staff, and if so, in what capacity and under what arrangements? Mr. MUNDIE. I served as a staff investigator from March 25, 1957, until January 31, 1960, on a detail basis.

The CHAIRMAN. You were detailed from the Treasury Department to assist the committee?

Mr. MUNDIE. That is correct.

The CHAIRMAN. In other words, you were on loan, in effect.

Mr. MUNDIE. That is correct.

The CHAIRMAN. During your work as a member of the committee staff, were you directed to, and did you, participate in the making of a preliminary investigation into charges that the committee had received pertaining to the conduct of affairs of local 706 of El Dorado, Ark., of the Steamfitters and Plumbers Union?

Mr. MUNDIE. I did.

The CHAIRMAN. When did you begin this preliminary investigation, do you recall?

Mr. MUNDIE. During January of 1960.

The CHAIRMAN. During January of 1960?

Mr. MUNDIE. Yes, sir.

The CHAIRMAN. You began your investigatiton early in January of 1960 ?

Mr. MUNDIE. That is correct.

The CHAIRMAN. What particular charges did you look into? Mr. MUNDIE. During the course of my investigation, I made an analysis of the books, records, cash receipts, disbursements, canceled checks, and audit reports

The CHAIRMAN. Let the record show, please, that Senator Ervin enters the committee room at this point.

(Senator Ervin entered the committee room.)

Mr. MUNDIE. For the period July 1, 1952, to December 30, 1958. The CHAIRMAN. What records were those that you examined? Mr. MUNDIE. The cash receipts, disbursements, canceled checks, and audit reports.

The CHAIRMAN. Did that pertain just to the union funds, that is, dues money?

Mr. MUNDIE. That is correct.

The CHAIRMAN. Did you investigate any other funds?

Mr. MUNDIE. I did.

The CHAIRMAN. What were they?

Mr. MUNDIE. There was a joint venture between local 665 at Pine Bluff, local 155 at Little Rock, and local 706, El Dorado, Ark.

The CHAIRMAN. Briefly, what was this joint venture between these locals?

Mr. MUNDIE. This was a joint venture between the locals on a particular job, the U.S. arsenal being constructed at Pine Bluff, Ark. The CHAIRMAN. Was there some agreement entered into between the officials of these three locals regarding the handling of financial matters?

Mr. MUNDIE. There was an agreement entered into for the three business agents, namely, Earl Griffin from local 706; R. S. Chambliss from local 655, Pine Bluff; and Mr. David Dove from local 155, Little Rock, Ark.

The CHAIRMAN. Was that agreement entered into in writing? Mr. MUNDIE. That agreement was entered into in writing and signed by all three business agents.

The CHAIRMAN. Do you have a photostatic copy of it before you? Mr. MUNDIE. I do.

The CHAIRMAN. Is the original on file with you?

Mr. MUNDIE. Yes, sir.

The CHAIRMAN. You have the original in the committee files? Mr. MUNDIE. No, we do not have the original. We have a photostat that was obtained from local 155, and also a photostat from local 665. The CHAIRMAN. Did you obtain these photostats?

Mr. MUNDIE. I did.

The CHAIRMAN. You have then a photostatic copy of that agreement?

Mr. MUNDIE. Yes, sir.

The CHAIRMAN. That photostatic copy may be made exhibit No. 1. (The document referred to was marked "Exhibit No. 1" and may be found in the files of the subcommittee.1

The CHAIRMAN. That document may be printed in the record. (The document referred to follows:)

AGREEMENT BETWEEN PINE BLUFF LOCAL 665, LITTLE ROCK LOCAL 155, AND EL DORADO, ARK., LOCAL 706 OF THE UNITED ASSOCIATION

Adherence to our obligations in the United Association is the paramount interest of the officers of the above three local unions in the State of Arkansas. We must have the common interest of all United Association members at heart and our separate interests should be and are subordinate.

There being inequality in wage rates throughout the State of Arkansas, local union 706 has accepted the responsibility of securing for journeymen employed on Pine Bluff Arsenal Depot the prevailing wage of local union 706 for all UA members employed thereon.

It is hereby agreed that a mutual understanding exists between the three organizations who are to participate equally in the revenue derived from the project.

Local union 706 shall have complete control and jurisdiction over any expansion program developing in connection with the present arsenal, shall supervise the expenditures, the jurisdiction, and the employment and be the sole representative of the journeymen and apprentices of the plumbing and pipefitting industry employed there. The local shall employ journeymen who are available in either of the other two local unions in equal proportion if available as nearly as possible through commonsense judgment.

1 The Senate Select Committee on Improper Activities in the Labor or Management Field was discontinued on Mar. 31, 1960. By sec 5, S. Res. 255, 86th Cong., the jurisdiction of the select committee was transferred to the Committee on Government Operations. By the same resolution all files of the select committee were placed in the custody of the Committee on Government Operations. Thereafter, the investigative jurisdiction and custodial responsibilities were delegated to the Permanent Subcommittee on Investigations.